We are living in an era of entrepreneurship and self-employment. Today more than ever, people realize the power of working for themselves and having the freedom to be your boss. While working for yourself as a contractor or starting a business sounds attractive, it is not for everyone, and some steps need to be assessed before taking that leap.
The first step towards being self-employed is to ask yourself if this is something that works for me and my current circumstances. If you have a family with small children, you have to think about healthcare insurance. If you can have a secure job, that pays well, with benefits it may not be in your best interest to be self-employed. Self-employment is risky, and it may not be in your best interest to put your family at risk of the inevitable ups and downs of self-employment. You also to take into consideration your age and your plans for retirement. Being self-employed, you are genuinely on your own, and there isn’t a huge corporation that will give an excellent severance package when you are entering your twilight years. You also need to take a long look at the type of person you are when considering working for yourself. You have to have thick skin to deal with rejections regularly and the uncertain nature of entrepreneurship.
After you have assessed your situation and have decided that self-employment is in your best interest, you need to determine how much money will be required to get going. While some sectors don’t require much funding to get started others will. For example, if you are going to resale products your make or purchase in bulk, you will need money to purchase materials, equipment, and funds to acquire the bulk items. You will also need cash for buying shipping materials, including boxes and postage. If your business is, for example, landscaping, you will need funding to purchase equipment including lawn mowers, trimmers, a truck to transport things, and materials for waste, to name a few.
Regardless of your sector, you will be working in; you will need funding to cover living expenses until you become profitable. As you will learn to be self-employed, you don’t get paid until your clients pay their bill. If a client decides to push your payment off until next month, you will have to wait, and without funding to cover costs, you will find yourself in an uncomfortable position. Take some time to sit down and go over your monthly expenses to determine the dollar amount needed to stay afloat. If after a close and honest look at what you need and you decide you need an influx of capital to get started, you may need to explore loan options from banking institutions or loans from friends and family members.
Planning is necessary if you need to create a business plan for a startup or if you plan to be an independent contractor. Being 100 percent responsible for your income is a heavy burden, and it is critical to make well-calculated decisions. If you decide on taking the startup route, a well-written business plan can be used not only to map out your business strategies carefully, but it can be used to attract investors. If you create a business plan that attracts outside investors who believe in the profitability of your company, those investment funds can be used to cover your expenses and allow you to focus on growing the business. Solid business plans increase your chances of success drastically as they include market research and other areas you may overlook. For consulting or other non-startup self-employed options a detailed plan on exactly how you plan to use your skills to generate capital is very important, as you need to ensure you are efficiently using your time to generate revenue.
If you are planning to grow a real business, there are essential administrative related tasks that must be completed and maintained. What type of business are you planning to run, corporation, limited liability corporation, sole proprietorship, etc.? There are processes and fees associated with each option as well as pros and cons. Depending on the type of business you must complete before doing business under your company’s name. You will also need to register your company if you plan to run your business in your home. There are also limits on the type of business you perform in a home office without the need to have certain levels of insurance coverage. In some case, it may be required to rent additional space outside your home, as some states only allow office work in your home office.
When dealing with hands-on blue-collar businesses, insurance is required by law to cover accidental harm to people and property. If you, for example, have an information technology consulting company, that requires you to go to client to working on machines, insurance is a must to cover all sorts of possible mishaps.
While a business account is not necessary, it gives your company a level of professionalism that is conducive for business growth and reputation. You will have to have a legitimately registered company and tax-id to open an account.
If you plan to allow customers to make payments online or not, a business website like a business bank account gives your company a professional look. When you purchase server space and secure a unique web address name, the hosting company will provide with at least one email address, email@example.com. By using your personalized email address will look more professional and series than firstname.lastname@example.org.
Get to Work
Now that you have all your administrative issues in order, you are ready to get to work. Being self-employed means, you are responsible for your success. You should be professional in every aspect of your business and go above and beyond for all your clients as this will help you grow and be successful.